money going down the drain

This week I spent some time going through my monthly outgoings and working out the amount I spend on subscriptions. It turns out I am spending £59.92 a month on them, and £38.98 of this is on subscriptions that I am not even using! I am wasting £467.76 a year and I’m sure I’m not the only one guilty of this. Is it time to be a little more sensible with my money?

The latest instalment of the Forgotten Subscriptions Index from TopCashback.co.uk, the UK’s most generous cashback shopping site, reveals consumers in the south-east are now wasting £73 million* each month on subscriptions they rarely use, as more than two-fifths (42 per cent) continue to pay for services they do not get value from.

In 2017, consumers were shelling out £17.73 each month, totalling to £59 million. However, both a rise in the cost of TV and music streaming services, and the number of like-for-like platforms available to consumers, have contributed to the monthly spend rising to £19.32, totalling to a £14 million increase year-on-year.

It’s true that there are many subscriptions out there that offer different membership options, to pay less and receive less or vice versa, but are these tailored enough to the individual user?

Nearly two-thirds (61 per cent) of consumers in the south-east feel brands are charging too much for the subscription services they provide, while half (50 per cent) feel there is a lack of variable pricing depending on usership. Three in 10 (29 per cent) said their subscriptions lack value for money because of an absence of choice. A further 21 per cent would prefer a more personalised service in order to make their subscriptions worth the monthly direct debit.

Consumers in the south-east ranked gym memberships as the worst value for money (40 per cent). However, six in 10 (61 per cent) consumers buy into these types of services each month, costing a meaty £42.29.

Financial services such as Experian came second on the list of the worst value for money services (35 per cent), despite consumers paying just £7.63 each month. This was closely followed by lifestyle subscriptions (e.g. monthly delivery of beauty boxes, razor blades and contact lenses) (30 per cent).

Top five worst value for money subscriptions

  1. Gym memberships (40%)
  2. Financial services (35%)
  3. Lifestyle subscriptions (30%)
  4. Hobby subscriptions (26%)
  5. Weight loss programmes (26%)

Meanwhile, the subscription services giving consumers the most bang for their buck include TV streaming services, which were ranked the best-value for money by nearly two-thirds (62 per cent) of people, followed by magazine subscriptions (51 per cent) and product delivery services such as Amazon Prime and ASOS Premier (46 per cent).

Natasha Rachel Smith, consumer-money expert for TopCashback.co.uk, said: “With the likes of Netflix increasing their prices in October last year by 50p a month, and companies competing to offer exclusive content (meaning there is little cross over of material), consumers are paying more for access to multiple services to keep up-to-date with the latest music, TV shows and films.”

Savvy subscribers

The research also shows consumers in the south-east are taking a slightly different approach to managing their subscriptions to save money.

More than a third (35 per cent) of savvy consumers are subscribing and unsubscribing to services such as Netflix and NOW TV as-and-when it suits them. The majority (87 per cent) of people do so to save money, while 44 per cent want to take advantage of introductory offers. Twenty-two per cent even monitor when their favourite TV shows are showing and cancel and renew their subscriptions around them.

Consumers more forgetful with cancelling subscriptions

Despite consumers becoming savvier with the way they manage their subscriptions, nearly three-quarters (72 per cent) have continued to pay for a subscription they rarely use for three months or longer. Nearly a third (32 per cent) signed up for a free trial and forgot to unsubscribe while the same number say they are too busy to use the subscription. More than a quarter (28 per cent) find the process of cancelling too hard so have left it.

And it’s not just unused subscriptions that are costing consumers in the south-east. More than a fifth (21 per cent) of people have continued to pay for a subscription without realising the cost had increased and 14 per cent have hung on to a costly direct debit because of FOMO when it comes to Netflix shows.

Interestingly, there has also been a year-on-year increase in the number of people forgetting to cancel free trials with nearly half (49 per cent) forgetting in 2018 compared to just 28 per cent in 2017. Additionally, one in 10 (11 per cent) consumers have also been caught out by giving a subscription as a gift and forgetting to cancel it. Four per cent have even blindly continued to pay for a subscription for an ex-partner, costing a staggering £187.56* a year per person.

Most unused subscriptions in 2018

  1. Gym memberships (42%)
  2. Magazine or newspaper subscriptions (23%)
  3. TV streaming services (21%)
  4. Hobby subscriptions (20%)
  5. Financial services (20%)

Natasha Rachel Smith continued: “For a fourth year our research shows, consumers are still paying extortionate amounts of money for subscription services they do not use or need due to forgetfulness. An increasing number of platforms are also enticing consumers to part with more of their cash.

“As well as reviewing subscriptions regularly to see if they are still worth the money, it’s a good idea for consumers to move to pay-as-you-go options where possible, which can prove to be much more cost effective. It’s also important to pay close attention to the terms and conditions, especially when it comes to free trials, to avoid being trapped. With necessary subscriptions, looking for new sign-up discounts and cashback offers before committing to the direct debit can help bring costs down.”

Luckily for you, subscription to Key Women in Business Magazine is free! Meaning you can come and view our content at your leisure without the pressure of that monthly sum coming out of your bank account.

Tillie Berry
KWIB Correspondent

 

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